Correlation Between Changchun Faway and TianJin 712
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By analyzing existing cross correlation between Changchun Faway Automobile and TianJin 712 Communication, you can compare the effects of market volatilities on Changchun Faway and TianJin 712 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Changchun Faway with a short position of TianJin 712. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and TianJin 712.
Diversification Opportunities for Changchun Faway and TianJin 712
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and TianJin is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and TianJin 712 Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TianJin 712 Communication and Changchun Faway is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Changchun Faway Automobile are associated (or correlated) with TianJin 712. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TianJin 712 Communication has no effect on the direction of Changchun Faway i.e., Changchun Faway and TianJin 712 go up and down completely randomly.
Pair Corralation between Changchun Faway and TianJin 712
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 0.77 times more return on investment than TianJin 712. However, Changchun Faway Automobile is 1.29 times less risky than TianJin 712. It trades about 0.0 of its potential returns per unit of risk. TianJin 712 Communication is currently generating about -0.03 per unit of risk. If you would invest 1,040 in Changchun Faway Automobile on September 14, 2024 and sell it today you would lose (73.00) from holding Changchun Faway Automobile or give up 7.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Changchun Faway Automobile vs. TianJin 712 Communication
Performance |
| Timeline |
| Changchun Faway Auto |
| TianJin 712 Communication |
Changchun Faway and TianJin 712 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and TianJin 712
The main advantage of trading using opposite Changchun Faway and TianJin 712 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, TianJin 712 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in TianJin 712 will offset losses from the drop in TianJin 712's long position.| Changchun Faway vs. BeiGene | Changchun Faway vs. Kweichow Moutai Co | Changchun Faway vs. Beijing Roborock Technology | Changchun Faway vs. G bits Network Technology |
| TianJin 712 vs. Guangzhou Haige Communications | TianJin 712 vs. Zhongtong Guomai Communication | TianJin 712 vs. Zhengzhou Coal Mining | TianJin 712 vs. Changchun Faway Automobile |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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